Lawmakers and Justice Department auditors are examining millions of dollars in crime-fighting grants awarded by the agency last year in an effort to determine whether personal ties may have influenced the process, according to sources familiar with the inquiries.

The House Oversight and Government Reform Committee has interviewed current and former employees in the Justice Department's grant-making units about whether officials disregarded independent reviews and steered awards to favored groups, the sources said.

The Justice Department's inspector general, meanwhile, is looking into allegations of an improper hire, according to people who have been contacted because of the probe.

Confusion over the grants and the process under which they were distributed have been the subject of complaints within the Justice Department and the law enforcement community. Justice Department staff members who oversee money targeted for children and juvenile offenders first sounded alarms earlier this year about what they called a haphazard approach that disadvantaged worthy applicants in favor of a program that promoted golf for inner-city teenagers.

Now members of Congress and watchdog groups are calling on investigators to expand their inquiry into the Byrne Grant program, the federal government's primary effort to support local crime fighting across the nation.

"Grant programs are a great tool for distributing federal funds, but only if the process is truly open, fair and competitive," said Sen. Claire McCaskill (D-Mo.), who is demanding more information from the Justice Department. "Some bureaucrat cannot decide on a whim who gets precious tax dollars. It's insulting to all the programs that work hard on their applications to have merit take a back seat to who you know."

Each year, the Justice Department doles out more than $2 billion in grants to groups such as Neighborhood Watch, the National District Attorneys Association and the National Center for Missing & Exploited Children. The merit-based system is supposed to reward the most innovative approaches to attacking gangs, drug crime and youth violence. The resources are precious for state and local law enforcement groups fortunate enough to secure them in an era when counterterrorism takes top priority.

In 2007, lawmakers gave the Justice Department more than $150 million to dispatch as leaders saw fit, rather than earmarking it for specific groups as they had in years past. The idea was to herald an open approach to giving out grants.

But, according to documents and three sources familiar with events, the process did not work as anticipated. In some cases money was handed out without peer review. In others, unit leaders in the Bureau of Justice Assistance appear to have simply given grants to applicants who had won prior congressional budget earmarks in a carve-out from the competitive process, according to people familiar with the decision-making who spoke on the condition of anonymity because of the investigations.

At least some of the criticisms about the grants will be aired today when the House Oversight and Government Reform Committee, chaired by Rep. Henry A. Waxman (D-Calif.), will question J. Robert Flores, chief of the department's office of juvenile justice and delinquency prevention.

Flores was first cited by the trade publication Youth Today for his role in awarding a $500,000 crime prevention grant to the World Golf Foundation's First Tee Program. In making that call, Flores passed over other applicants, including a Washington-based criminal justice information-sharing program and the National Child Protection Training Center, both of which secured higher rankings through the peer review process, according to documents gathered by lawmakers and a former staff member.

Victor Vieth, a former Minnesota prosecutor who now leads the child protection center at Winona State University, said he was "heartbroken" when he learned last year that Flores's unit had rejected his application to develop a training program on child abuse for students preparing to become police officers and social workers.

"We had practically perfect [peer review] scores," Vieth said. "Anybody who's in this field, you're not in it for the money or the glory. You're in it to help children."

Flores has pointed out that the peer review was advisory only and that he and his staff had authority to make their own selections and carve out grant categories and priorities as they saw fit.

"Mr. Flores's decisions with respect to the grant-making process were made consistent with the law and departmental discretion," said Elliot S. Berke, his attorney.

Sources said this week that the inspector general also is looking into Flores's hiring of a contract employee to a well-paying job. The inquiry centers on how much work the contractor actually performed for the Justice Department, the sources said.

At the same time, the Project on Government Oversight (POGO), a watchdog group, McCaskill and current and former Justice Department employees have raised questions about the prestigious Byrne grant program, which dispatches a huge amount of money each year to groups that battle crime.

One source said that staff members in the Bureau of Justice Assistance, which oversees the Byrne grants, last year plucked some applications from other categories in a rush to find enough recipients for grants that target violent crime. The winners were awarded Byrne grants and given extra financial incentives in the form of a 10 percent "information sharing enhancement," according to an Aug. 27, 2007, memo by Domingo S. Herraiz, who leads the bureau.

Herraiz said in the "revised" funding recommendation memo that the unit had received 128 applications, 106 of which were "subsequently externally peer reviewed."

One of the applications that did not undergo such review was a $296,168 award to the Ohio Office of Criminal Justice Services for an anti-gang initiative in the city of Columbus, according to the documents, which were obtained by POGO.

Prior to his Senate confirmation in 2004, Herraiz had served as director of the Ohio agency.

Lindsay Komlanc, a spokeswoman for the Ohio Department of Public Safety, said the office followed "our same standard procedure" in applying for the award and did not receive special treatment "that we're aware of."

Justice Department spokesman Peter Carr said the Ohio project was recommended by career staff members and that Herraiz recused himself from final decision-making.

Separately, POGO and Justice employees are raising questions about another award, in which the Fraternal Order of Police of Ohio received $603,000 in Byrne crime prevention money for the "Ohio school alert system." The Ohio chapter, which did not return phone calls for comment, supported Herraiz's bid for the Justice Department job four years ago, according to sources familiar with the process.

At the time of the award, Cybele K. Daley was a deputy in the Justice Department office that oversees the Byrne grants, among other programs. She is married to James Pasco Jr., the executive director of the national Fraternal Order of Police. Daley subsequently left the government and now works as a Washington lobbyist.

In a phone interview, Daley said she lacked authority to make grant decisions at the Justice Department and instead devoted her time to congressional relations and the media. "I didn't even know the Ohio FOP had a grant," she said yesterday. For his part, Pasco said he had "absolutely no connection whatsoever" to the Ohio grant, which was arranged through the FOP's state chapter.

Justice Department spokesman Peter Carr said the Ohio FOP approached Herraiz about the project, which was reviewed through normal channels. The bulk of the grants at issue, Carr said, went to well-known crime-fighting organizations that might have been forced to close or slash payrolls because of last year's unusual budget process.

Danielle Brian, the executive director of POGO, called for further investigation. "When what should be a simple, straightforward process becomes murky, we think it's time to look more closely," she said.